Question

Ibarra Corporation uses the FIFO method in its process costing system. The first processing department, the Forming Department, started the month with 16,600 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $25,250. An additional 103,000 units were started into production during the month and 106,000 units were completed and transferred to the next processing department. There were 13,600 units in the ending work in process inventory of the Forming Department that were 30% complete with respect to conversion costs. A total of $599,123 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:______

Answer 1

Conversion Costs per unit = $ $599,123/ 110080= $ 5.442

Step-by-step explanation:

Conversion costs of $ $599,123

Units % of Completion EUP

D.M C.C D.M C.C

Units completed 106,000 100 100 106,000 106,000

Ending Inventory 13,600 100 30 13,600 4080

Total Equivalent Units Of Production 119600 110,080

Conversion Costs per unit = $ $599,123/ 110080= $ 5.442

Another way of finding out is through using the beginning inventory and the units started but as we do not have the % of completion for started units it cannot be computed.